Are QF feeling the pinch?
Thread Starter
Are QF feeling the pinch?
Story from the ABC News Online web site.
Maybe a few dark clouds ahead
Airline capacity cuts an early warning of Australian economic malaise
By business reporter Andrew Robertson
Posted yesterday at 5:27pm
Qantas has witnessed a steep fall in bookings and Virgin has its own problems.
A domestic capacity cut by Qantas in response to falling bookings could be an early warning that Australia's economy is not as healthy as it appears.
"In the past load factors have been a great lead indicator for what GDP is doing, so this announcement from Qantas may highlight that the Australian economy is actually doing worse than we think," said Kieran Kelly, CEO of Sirius Fund Management.
'You're going to choose the lowest price product'
Motley Fool's Scott Phillips said, despite the aura around Qantas of late, airlines are just cyclical commodities like iron ore and coal.
"It doesn't really matter to you once you're on the plane, whether you're flying Qantas or Virgin or one of the Middle East carriers or the Asian carriers," he said.
"They all do the same job, with about the same safety record and you're going to choose the lowest price product."
Price and capacity have been the traditional battleground for the domestic duopoly.
This time around they are taking a more cautious approach.
"The revenue might suffer for the next few months, or the next year or so, but, overall, their profitability will not fall off the cliff," .
Maybe a few dark clouds ahead
Airline capacity cuts an early warning of Australian economic malaise
By business reporter Andrew Robertson
Posted yesterday at 5:27pm
Qantas has witnessed a steep fall in bookings and Virgin has its own problems.
A domestic capacity cut by Qantas in response to falling bookings could be an early warning that Australia's economy is not as healthy as it appears.
"In the past load factors have been a great lead indicator for what GDP is doing, so this announcement from Qantas may highlight that the Australian economy is actually doing worse than we think," said Kieran Kelly, CEO of Sirius Fund Management.
'You're going to choose the lowest price product'
Motley Fool's Scott Phillips said, despite the aura around Qantas of late, airlines are just cyclical commodities like iron ore and coal.
"It doesn't really matter to you once you're on the plane, whether you're flying Qantas or Virgin or one of the Middle East carriers or the Asian carriers," he said.
"They all do the same job, with about the same safety record and you're going to choose the lowest price product."
Price and capacity have been the traditional battleground for the domestic duopoly.
This time around they are taking a more cautious approach.
"The revenue might suffer for the next few months, or the next year or so, but, overall, their profitability will not fall off the cliff," .
This actually works quite well for Qantas considering they are a bit under crewed at the moment and they have the resources to ride this out where as I don't know either Virgin can say the same, they are over crewed, paying to much for fuel and have cashflow problems.
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I don't know either Virgin can say the same, they are over crewed
65% of the market, worth what 3-4 billion and own just about everything outright. Yeah they're struggling!
How many new frames on order? Share price quadrupled in 5 years?
How many new frames on order? Share price quadrupled in 5 years?
Nunc est bibendum
Note though, this announcement comes out and the market promptly dumps QF share price by 15%. Chairman buys in to the tune of $100K. Anyone want to take odds on some positive news coming out in the next 4-6 weeks to take the share price back to the $4.15+ mark?
No, you've all got it wrong - I believe it was on Virgin that Grant was doing the pinching.
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all airlines are feeling the pitch, 1stly
1) Brussels happens & a certain % of people will not fly anywhere especially to Europe
2) Australia is broke, the govts that is. Fed budget in a few weeks. There's no money to be thrown around, but taxes must go up, spending must go down, especially on overgenerous welfare
3) fed election 2 July. Everyone in business, plays wait & see.
So in other words, for next 72 days, airlines will be tripping over themselves to give away seats.
Hell just got an email saying $900 return to NYC from BNE, SYD & MEL & $990 return to Europe from PER & a $100 more from east coast.
If Labor gets in, watch a few more domestic airlines shrink & international airlines pull out of Australia (not politics, just business has no confidence in Labor to control spending/fix economy)
Really interesting part will be who will control the senate ?
ALA ?
That new seniors party ? Who ?
1) Brussels happens & a certain % of people will not fly anywhere especially to Europe
2) Australia is broke, the govts that is. Fed budget in a few weeks. There's no money to be thrown around, but taxes must go up, spending must go down, especially on overgenerous welfare
3) fed election 2 July. Everyone in business, plays wait & see.
So in other words, for next 72 days, airlines will be tripping over themselves to give away seats.
Hell just got an email saying $900 return to NYC from BNE, SYD & MEL & $990 return to Europe from PER & a $100 more from east coast.
If Labor gets in, watch a few more domestic airlines shrink & international airlines pull out of Australia (not politics, just business has no confidence in Labor to control spending/fix economy)
Really interesting part will be who will control the senate ?
ALA ?
That new seniors party ? Who ?
Last edited by XPT; 21st Apr 2016 at 00:59.
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Things are a bit slower...
QF is choosing to grow a little slow - 0.5% rather than 2%
Reality is the larger part of QF hasn't done much new aircraft growth for a while
Last 737 - Nov 2014
Last 330 - Dec 2012 (granted planes back from JQ up to Sep 2015)
Last 380 - Dec 2011
Only some second hand 717s
Mainline fleet age must be creeping up again with no replacements - and the only thing on the horizon is 8 787s in 15+ months
Increasing the seatcout on 67 737s by 6 seats will help
QF is choosing to grow a little slow - 0.5% rather than 2%
Reality is the larger part of QF hasn't done much new aircraft growth for a while
Last 737 - Nov 2014
Last 330 - Dec 2012 (granted planes back from JQ up to Sep 2015)
Last 380 - Dec 2011
Only some second hand 717s
Mainline fleet age must be creeping up again with no replacements - and the only thing on the horizon is 8 787s in 15+ months
Increasing the seatcout on 67 737s by 6 seats will help
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XPT is right with Para 3)
Any time an election is announced in Oz lots of people immediately stop having holidays, even weekends away (ask any B&B owner) or spending on big ticket items.
Ask those same people if they intend to resume their spending ways if the Libs get in and they say yes. What if labor gets in, yes again.
There's no figuring it out, just how it's been for years.
So, get some cheap seats now and avoid the rush on 3rd July.
Any time an election is announced in Oz lots of people immediately stop having holidays, even weekends away (ask any B&B owner) or spending on big ticket items.
Ask those same people if they intend to resume their spending ways if the Libs get in and they say yes. What if labor gets in, yes again.
There's no figuring it out, just how it's been for years.
So, get some cheap seats now and avoid the rush on 3rd July.
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XPT is right with Para 3)
Any time an election is announced in Oz lots of people immediately stop having holidays, even weekends away (ask any B&B owner) or spending on big ticket items.
Ask those same people if they intend to resume their spending ways if the Libs get in and they say yes. What if labor gets in, yes again.
There's no figuring it out, just how it's been for years.
So, get some cheap seats now and avoid the rush on 3rd July.
Any time an election is announced in Oz lots of people immediately stop having holidays, even weekends away (ask any B&B owner) or spending on big ticket items.
Ask those same people if they intend to resume their spending ways if the Libs get in and they say yes. What if labor gets in, yes again.
There's no figuring it out, just how it's been for years.
So, get some cheap seats now and avoid the rush on 3rd July.
Can't agree ... if Labor some how gets in, it will be batten down the hatches & hold on for a very rough ride. That said whoever gets in MUST control the senate. We can't have the idiot Greens & other corss benches deciding what gets done.
Off topic a little but Chukkas Qld govt is trying to ban Uber. Good luck with that.
Australia is broke, the govts that is.
but taxes must go up, spending must go down, especially on overgenerous welfare
Can't agree ... if Labor some how gets in, it will be batten down the hatches & hold on for a very rough ride.
Really interesting part will be who will control the senate ? ALA ? That new seniors party ? Who ?
The perfect balanced sample:
Soros Says China's Debt-Fueled Growth Echoes U.S. in 2007-08 - Bloomberg
The 54% Rally in Steel Prices That Points to China's Rapid Shift - Bloomberg
And on the Australian debt front - How did that school hall, NBN and $800 handout fiasco work out? Enjoying the $250m weekly interest payment? Anyone worried about illicit taxation of Super?
AJ's fine though - no need to worry there. Or about Board members or the QF incompetents that Group Think themselves into being genii for having such great and hard won remuneration packages.
Soros Says China's Debt-Fueled Growth Echoes U.S. in 2007-08 - Bloomberg
The 54% Rally in Steel Prices That Points to China's Rapid Shift - Bloomberg
And on the Australian debt front - How did that school hall, NBN and $800 handout fiasco work out? Enjoying the $250m weekly interest payment? Anyone worried about illicit taxation of Super?
AJ's fine though - no need to worry there. Or about Board members or the QF incompetents that Group Think themselves into being genii for having such great and hard won remuneration packages.